When beginning an evaluation of cloud services, it is imperative to understand the distinctions between the different types of cloud. The type of cloud can impact how your data is segregated, where and what type of infrastructure is used, and built-in features, such as disaster recovery, backup, and intrusion detection. As a hedge fund, it is even more important to remain conscious of these factors due to the enhanced security and regulatory requirements relating to the data that your firm handles and generates.
Deployment Options: Public vs. Private Cloud
There are two main categories of cloud: public cloud and private cloud. Public clouds are provided through an outsourced provider and enable firms to pay a low monthly fee to access a shared hosting environment, making it more scalable and cost effective. Public clouds offer services at a lower rate, but, by offering less customization, users have less control over their data, and can feel that security is compromised.
Public clouds also offer far less insight into where and how data is segregated and stored. In comparison, the private cloud is a technology environment that can be built by an outsourced provider or internally, and enables firms to access their own private virtual data center.
Private clouds can be designed as single or multi-tenant.
The multi-tenant approach utilizes shared infrastructure between multiple firms or departments, but with segregation within the infrastructure components through a variety of methods, such as physical, logical, data, network, or performance segregation. This model offers an enhanced level of security as compared with a public cloud model.
In a single-tenant private cloud, the client is designed a separate, private piece of custom designed infrastructure where all the data will sit and not be shared by other firms. The downside of this, of course, is a more expensive solution, as additional dedicated hardware is required for each new customer. Software upgrades are more complex to deploy and scalability is limited by the hardware available.